Perhaps stung by the nationalistic backlash against Barrick Gold Corp’s merger with Randgold Resources, Newmont Mining devoted a big chunk of its news release Monday explaining how its $10-billion offer for Vancouver-based Goldcorp will help Canada.
But there’s no hiding the fact that the global head office of the world’s largest gold miner will be in Greenwood Village, Colorado, where Newmont is based. Like “New Barrick,” which no longer has its top executives in Canada, Newmont Goldcorp’s incoming chief executive officer and current chairwoman are expected to remain in the US. While some jobs will flow from Nevada to the miner’s new regional base for North America in Vancouver, it’s hard to imagine the influence of that city not waning as a result of the deal.
“Anytime you lose a head office, I think that’s probably a negative but we know the Newmont senior team well, they’re smart people, they’ve built a good business, a big part of Goldcorp’s business is their Canadian production,” said Sean Boyd, CEO of Agnico Eagle Mines, a Toronto-based goldminer.
Typically, foreign takeovers of Canadian companies have bled strategic vision, high-paying jobs, management expertise and a host of ancillary services from finance and human resourcesto accounting. Like Falconbridge, Inco and Alcan before, this latest deal in the mining sector will see Goldcorp’s Canadian head office disappear.
Newmont tried to mitigate that reality by saying the merger will ensure Canada’s gold industry will participate in a “world-leading natural resources company,” with a “significant” Canadian presence on the board.
The deal comes as the “hollowing out” debate has been resurrected in Canada. Barrick’s move to shift jobs away from Canada has intensified since the Randgold merger was announced; its current Toronto headcount is down to just 60 to 70 employees on one floor of a Bay Street office tower. The gold miner, founded by the late Peter Munk in Toronto in the 1980s, has just one Canadian director.
Earlier this month, former Newmont vice chairman Pierre Lassonde was quoted in Canada’s Globe and Mail saying Munk would be rolling over in his grave at the turn of events. At a Canadian Mining Hall of Fame dinner last week, he opened his remarks with a jab at the single Barrick table, suggesting anyone in the audience wanting to meet Barrick employees should do it fast as they could be gone before the end of dinner.
Yet as Canada’s once-mighty resource industries shrink – the energy sector is seeing its own share of pain – the economy has hardly been hurting. Growth was a Group-of-Seven-leading 3%in 2017. And while economists see that slowing to 2.1% in 2018 and 1.9% in 2019, job growth remains solid with the unemployment rate at a four-decades low of 5.6% in December.
Much of the country’s growth has been driven by consumption – largely housing – which is now fading too but new industries are also rising – technology in particular. Toronto alone created more tech jobs than the San Francisco Bay area, Seattle and Washington, D.C., combined last year, while leapfrogging New York in a ranking of “talent markets”, according to CBRE Group Inc.
Global giants including Microsoft, Google, and Amazon.comare generating thousands of new jobs while home grown stars such as Shopify expand. Meanwhile, Toronto’s financialservices sector has become the second-largest in North America. Four of North America’s top 10 banks based on assets are now Canadian.